System and method and managing commodity transactions

ABSTRACT

Methods and systems for managing the sale of commodities, such as tier-priced commodities, are described. Risk is managed by bundling with the commodity a financial instrument designed to indemnify against the risks associated with purchasing the commodity. The financial instrument may be an insurance instrument, for example. In one embodiment, bundled products are offered for sale to two or more bidders, at respective offer prices. The bidder that exceeds their respective offer price by the greatest amount is sold the bundled product. Different prices may be offered to different purchasers for respective bundled products. The offers, bids, and determination of who wins the bidding may be made by processors or computers coupled to networks, such as the Internet.

RELATED APPLICATIONS

The present application is a continuation of pending U.S. patentapplication Ser. No. 12/583,166, which was filed on Aug. 14, 2009 andwill issue on Nov. 6, 2012 bearing U.S. Pat. No. 8,306,869, which is acontinuation of U.S. patent application Ser. No. 11/034,293, which wasfiled on Jan. 12, 2005 and issued on Aug. 18, 2009 bearing U.S. Pat. No.7,577,606, which is a division of U.S. patent application Ser. No.09/330,446, which was filed on Jun. 11, 1999 and issued on Mar. 1, 2005bearing U.S. Pat. No. 6,862,580, all of which are incorporated byreference, herein.

FIELD OF THE INVENTION

The present invention relates to a system and method for managing thesales of a commodity within a tiered pricing structure. Moreparticularly, the present invention relates to a system and method formanaging the risks and costs of delivering a commodity from a lessexpensive tier by use of a financial instrument to indemnify againstloss from risks associated with purchasing a commodity from that tier.

BACKGROUND OF THE INVENTION

Deregulation of the various utility industries is creating newopportunities for utility customers to reduce their cost of purchasingwater, electricity, natural gas and telecommunications services.Traditionally, because of government regulation, customers in a givengeographic area were restricted to purchasing their utilities fromsingle sources (i.e. there was no choice as to where a consumer couldbuy his or her power, all of a consumer's electricity came from a singlelocal electric utility). Today, most power (primarily electricity)customers rely on what is referred to as “firm” power provided by theirlocal utility companies.

Considering electricity as an example, “firm electric power” meanselectricity is delivered to the customer on a non-interruptiblehigh-priority basis (i.e. 24 hours a day, 7 days a week throughout theyear). Electric utilities must supply electricity to its firm powercustomers on demand. Because of its guaranteed availability, this is themost expensive long term contractual power a customer may purchase. Analternative to this is for the customer to purchase “interruptiblepower”. Because interruptible power rates are generally substantiallylower than firm power rates, the customer can realize a significantsavings. The downside to the use of interruptible power by the customeris that it may not be available when the customer needs or wants it andtherefore the customer or the customer's utility provider may be forcedto buy power from an alternative source (also referred to as “spot”power). Spot power is typically much more expensive than interruptibleor firm power and it may not be economically feasible for a customer tobuy spot power for short durations when their interruptible power isunavailable.

The distinction between interruptible electric power and firm electricpower creates a two-tiered pricing structure for electricity as acommodity (there are additional sub-tiers such as industrial, retail,and utility-to-utility power). Traditionally, if an electric powercustomer wanted to take advantage of low cost interruptible power theywould have to gamble that the additional costs due to having to purchasespot power during an interruption would not be greater than the savingsattributed to using interruptible power. Because most interruptions ininterruptible electric power are due to seasonal weather (heat inparticular) changes it is possible to estimate from historical data howmuch spot power a customer may have to purchase during a given period oftime.

One method of dealing with the risk interruptions would be to set aside,hopefully in some type of profitable investment, an amount of moneyequivalent to the estimated costs of purchasing spot power for thepredicted interruptions. While a possible solution, this method would bedifficult for the average utility customer to implement because of thelack of available information and skill with determining the frequencyof interruptions. Another option, if available, would be to purchaseinterruptible power during the time of year when interruptions areunlikely and buy firm power when interruptions are likely to occur.While better than purchasing nothing but interruptible power, thismethod does not provide the same savings as it is possible to realizeusing a larger percentage of interruptible power and it is stillpossible to be surprised by interruptions requiring the customer to buyspot power.

SUMMARY OF THE INVENTION

One embodiment of the present invention teaches a method for managingthe sales of a tier-priced commodity, such as electricity. In oneexample, the method comprises determining the prices of the commodity atthe available tiers and determining the price of a financial instrument,such as an insurance instrument, to indemnify the risk. The risk mayvary based on the purchaser. The commodity at the lower tier is bundledwith the insurance instrument and a price for the bundled product isdetermined based, at least in part, on the price of the commodity at thelower tier and the price of the insurance instrument. The insuranceinstrument may cover the cost of any potential loss incurred by thepurchase of the commodity at a given tier, including the cost ofpurchasing the commodity from an alternative source. For example, it maybe necessary for a utility selling the commodity to purchase thecommodity on the spot market, at higher prices than the lower tierprice, for example. While the invention discussed herein may be appliedto numerous tier-priced commodities and services for which there is aquality of service distinction (i.e. telecommunications services, suchas telecommunications bandwidth), the preferred embodiment discussedherein will focus on the management of the sales of electrical power.

The transaction may be carried out between the seller of electricalpower and the customer, both wholesale (another utility, a municipality,rural cooperative or large manufacturing concern) and retail (individualconsumers), via a seller's computer and a customer's computer over acomputer network, for example.

In another embodiment, the customer, through the use of a personalcomputer, compares the cost of a commodity from different sources andfinancial instruments from different sources which may be purchased toindemnify against loss caused by risks associated with the commodityfrom different sources. Typically, the cost of the commodity and thefinancial instrument will vary depending upon the amount beingpurchased, the location of the customer, transportation variables, thecapacity of the commodity provider and other factors.

In another embodiment, online auctions are conducted to sell a commodityand a bundled financial instrument, such as an insurance instrument, toindemnify against loss associated with at least one risk related topurchase of the commodity by respective bidders, to the highest bidder.In one example, a system to manage the sale of a commodity bundled withan insurance instrument is disclosed. The system comprises memory tostore prices for respective bundled products comprising a commodity anda respective insurance instrument to indemnify against loss associatedwith at least one risk related to the purchase of the commodity byrespective bidders. A processor is coupled to the memory. The processoris programmed to provide each bidder a respective price for a respectivebundled product. The processor is also programmed to determine which ofthe bids received from bidders exceeds the respective price provided toeach bidder, by a greater amount. The bundled product is sold to thatbidder. In another example of a related embodiment, the memory storescommodity price data and insurance valuation data, and the processor,which is coupled to a network, is programmed to determine a respectiveprice for respective bundled products for each of a plurality ofbidders.

In accordance with one embodiment, a method of managing a sale of acommodity is disclosed comprising providing, by a first processor, overa network, a respective price for a respective bundled product torespective second processors of a plurality of bidders, each bundledproduct comprising a commodity and a financial instrument to indemnifyagainst loss associated with at least one risk related to purchase ofthe commodity by a respective bidder. The method further comprisesdisplaying to a respective bidder the respective price for therespective bidder, by a respective display coupled to each respectiveprocessor, and receiving, by the first processor, via the network, bidsfor respective bundled products from at least some of the respectivesecond bidders. The first processor determines which of the biddersexceeds their respective price by a greater amount and the respectivebundled product is sold to that bidder.

The respective bundled product may be sold by the first processor.Respective prices may be determined by the first processor based, atleast in part, on a price for the commodity for sale to each respectivebidder with the at least one risk and a value for the financialinstrument to indemnify each respective bidder. The values of respectivefinancial instruments may be based, at least in part, on one or morefactors associated with each respective bidder. The at least one riskmay include a risk of interruptions in delivery to each bidder andrespective insurance instruments may indemnify against loss associatedwith the interruptions. The financial instrument may be an insuranceinstrument. The commodity may be electricity, natural gas, water, andtelecommunications services, for example.

In accordance with another embodiment, a method for managing the sale ofa tier-priced commodity is disclosed comprising displaying to a firstbidder a first price for a first bundled product comprising a commodityand a first insurance instrument to indemnify the first bidder againstloss associated with at least one risk related to the purchase of thecommodity, on a first display device coupled to a first processor. Themethod further comprises displaying to a second bidder a second pricefor a second bundled commodity comprising the commodity and a secondinsurance instrument designed to indemnify the second bidder againstloss associated with at least one risk related to the purchase of thecommodity, on a second display device different than the first displaydevice, coupled to a second processor different from the firstprocessor. Bids are received by a third processor different than thefirst and second processors, for the first bundled product from thefirst bidder and for the second bundled product from the second bidder,from the first and second processors, respectively. The third processordetermines which of the first and second bidders exceeds theirrespective first and second prices by a greater amount. The methodfurther comprises selling the first bundled product to the first bidderif the first bidder exceeds the first price by a greater amount than thesecond bidder exceeds the second price or selling the second bundledproduct to the second bidder if the second bidder exceeds the secondprice by a greater amount than the first bidder exceeds the first price.

The first price and the second price may be different. The at least onerisk may include a risk of interruptions in delivery and the first andsecond insurance instruments may indemnify against loss associated withinterruptions in delivery of the commodity to first and second bidders,respectively. The price of the first and second insurance instrumentsmay be based, at least in part, on one or more factors associated withthe first and second bidders, respectively. The bids may be receivedfrom the first and second processors, via at least one network. The atleast one network may comprise the Internet. The commodity may beelectricity, natural gas, water, and telecommunications bandwidth, forexample.

In accordance with another embodiment, a method of managing a sale of acommodity is disclosed comprising receiving by a first computerassociated with a first party a price for a bundled product comprising acommodity and a first financial instrument to indemnify against lossassociated with at least one risk related to purchase of the commodityby the first party, via a first network. The method further comprisesreceiving by a second computer associated with a second party a secondprice for a bundled product comprising the commodity and a secondfinancial instrument to indemnify against loss associated with at leastone risk related purchase of the commodity by the second party, via asecond network. A first bid is sent from the first computer, via thenetwork and a second bid is sent from the second computer via thenetwork. If the first party exceeds the first price by more than thesecond bid exceeds the second price, the first party receives thebundled product for the first price, and if the second party exceeds thesecond price by more than the first party exceeds the first price, thesecond party receives the bundled product for the second price.

The first and second networks may comprise the Internet. The first andsecond prices may be received from a third computer, via the Internet,and the first and second bids may be sent to the third computer, via theInternet.

Different prices may be provided to each bidder, for respective bundledproducts.

These and other features and advantages of the present invention will bepresented in more detail in the following specification of the inventionand the accompanying figures which illustrate by way of example theprinciples of the invention.

BRIEF DESCRIPTION OF THE DRAWINGS

The present invention will be readily understood by the followingdetailed description in conjunction with the accompanying drawings inwhich:

FIG. 1 a is an overview description of the operational model of thepresent invention wherein a buyer purchases a combined commodity andfinancial instrument from a commodity seller;

FIG. 1 b is an overview description of the operational model of thepresent invention wherein a buyer purchases a commodity from a commodityseller and a financial instrument from a financial instrument broker;

FIG. 2 a illustrates one embodiment of the present invention in which afinancial instrument is in place guaranteeing delivery of electricalpower and there is no interruption;

FIG. 2 b illustrates one embodiment of the present invention in which afinancial instrument is in place guaranteeing delivery of electricalpower and there is an interruption;

FIG. 3 a illustrates one embodiment of the present invention in which afinancial instrument is in place guaranteeing delivery of natural gasand there is no interruption;

FIG. 3 b illustrates one embodiment of the present invention in which afinancial instrument is in place guaranteeing delivery of natural gasand there is an interruption;

FIG. 4 is a flowchart illustrating the method steps of one embodiment ofthe present invention;

FIG. 5 a is a diagram illustrating the use of a client computer tocontact a commodity seller computer to carry out the present invention;

FIG. 5 b is a diagram illustrating the use of a client computer tocontact a commodity seller computer and a financial instrument sellercomputer to carry out the method of the present invention;

FIG. 6 is a flowchart illustrating the method steps of one embodiment ofthe present invention;

FIG. 7 is a diagram illustrating a multiple bid implementation of thesystem of the present invention; and

FIG. 8 illustrates the system of the present invention being used tosolicit quotes from more than one seller.

DETAILED DESCRIPTION OF THE INVENTION

Reference will now be made to the preferred embodiment of the invention.An example of the preferred embodiment is illustrated in theaccompanying drawings. While the invention will be described inconjunction with that preferred embodiment, it will be understood thatit is not intended to limit the invention to one preferred embodiment.On the contrary, it is intended to cover alternatives, modifications andequivalents as may be included within the spirit and scope of theinvention as defined by the appended claims. In the followingdescription, numerous specific details are set forth in order to providea thorough understanding of the present invention. The present inventionmay be practiced without some or all of these specific details. In otherinstances, traditional process operations have not been described indetail in order to not unnecessarily obscure the present invention.

In a tier-priced industry, the use of a financial instrument toguarantee commodity delivery and lower the cost of delivering thecommodity can be implemented in two distinct ways. FIG. 1 a illustratesa buyer 2 purchasing a tier-priced commodity 8 bundled with a financialinstrument 10 from a commodity seller 4. In this example the buyernegotiates the purchase of the bundled commodity 8 and financialinstrument 10 with the commodity seller 4. The financial instrument 10would be triggered and executed to absorb the additional costs ofpurchasing spot power under the conditions described in the financialinstrument. In the preferred embodiment the tier-priced commodity iselectrical power being sold by a generating utility or broker and thefinancial instrument is an insurance policy or hedging contract. Thebuyer 2 may be any consumer of the purchased commodity 8 (i.e. anindividual, a large manufacturing concern, a rural cooperative, amunicipality or another generating utility) and the seller 4 may be acommodity generating utility or commodity reseller. In one embodiment,the financial instrument 10 is offered by the commodity provider 4 alongwith the commodity 8 as a bundled product (the purchase price of thecommodity includes the purchase price of the financial instrument usedto guarantee the delivery of the commodity). FIG. 1 b illustrates analternative embodiment in which the buyer 2 purchases the financialinstrument 10 and the commodity 8 separately. In this example thefinancial instrument 10 is purchased from a financial instrument broker6 such as an insurance company (in the case of an insurance policy) orbrokerage house (in the case of a hedging contract or derivativecontract).

FIG. 2 a illustrates the use of an insurance policy 18 to protectagainst an interruption in service to a customer 16 (in this example amunicipality). In FIG. 2 a a municipality 16 purchases interruptiblepower from a generating utility 12. The municipality 16 has alsopurchased an insurance policy 18 as part of a bundled product from thegenerating utility 12 or an insurance company such as the financialinstrument broker 10 (See FIG. 1 b). If there is no interruption inservice then the municipality 16 receives its power as contracted fromthe generating utility 12 and there is no need to purchase spot powerfrom another utility 14 (or the power pool). Purchasing a commoditysupported by an insurance policy 18 allows the municipality 12 topurchase power at a reduced interruptible rate. The insurance policy 18takes effect if there is an interruption in service governed by theterms of the policy. Typically, the terms of the insurance policy willcover foreseeable interruptions and not force majeure events. Theinsurance policy 18 is designed to take into account the risksassociated with purchasing interruptible power. A risk coefficient maybe calculated based on the risks associated with purchasing thecommodity at the lower tier, for example. These risks include historicaldata regarding the weather in and around the municipality 16 (theconsuming area), the current/predicted future capacity of the generatingutility 12 and the current/predicted future demands of the municipality16 (the load profile). If there is an interruption in service, theinsurance policy 18 will provide the finances necessary to allow thegenerating utility 12 to purchase or generate needed power to supplementthe interruption. In the case where the municipality 16 holds theinsurance policy 18 (purchased it separately from the commodity) thefinancial proceeds of the policy are paid to the generating utility 12or an alternative source 14 or a transmitting utility to augment supplyby purchasing or generating additional power. Referring to FIG. 2 b,with the insurance policy 18 covering the cost of purchasing expensivespot power, the alternative source 14 (the providing utility or powerpool) would transfer the supplemental power to the municipality throughthe generating utility 12 or through another system(transmitting/distributing utility) depending upon the circumstances.

When a municipality 16 (or any customer for that matter) is theinsurance policy holder, an agreement among the electricity provider,the insurance provider, and the end-user would be structured to provideinterruptible power under a mutually acceptable set of circumstances.This agreement allows the generating utility 12, through their tradingfloor, to purchase power for interruptions on behalf of the municipality16 (including the end users), using funds provided by the insurancepolicy held by the municipality 16. In an alternative embodiment theend-users would contract directly with the generating utility and theinsurance provider.

FIGS. 3 a and 3 b illustrate the application of the present invention tothe natural gas industry. A natural gas producer 20 provides gas to anational pipeline company 22 which is conceptually similar to thenational electrical grid. The national pipeline company 22 provides gasto a local distributor 26 who in turn provides gas to the end-user 30.In the event of an interruption in gas service (which may be occasionedfor equally predictable reasons as they are in the electrical industry)an insurance policy 28 (or other financial instrument) will provide thefunds to supplement the interruption from an alternative source 24.

The implementation of the present invention from the generating utilityand end-user may be accomplished via traditional business means(typically written agreements) or via a computerized transaction. If thetransaction is carried out over a computer network (via the Internet inthe preferred embodiment), a wholesale or retail customer would be ableto purchase the utility commodity from the provider either with orwithout an attached financial instrument. The purchaser would also beable to purchase the commodity from one provider and the financialinstrument from a separate financial broker. Sales by a utility may beconditioned upon the purchase of an insurance policy by the purchaser.In another embodiment, an alternative energy provider may sell hedgecontracts supported by its own power generating surplus. In yet anotherembodiment, purchasers bid on available power and financial instrumentfrom a variety of different providers.

FIG. 4 illustrates the method steps of the present invention as theywould be carried out through traditional processes or as implemented insoftware on one or more computers. At step 32 a price is determined forthe commodity at a first tier. In the preferred embodiment, this will bethe price for firm electrical power in a particular class (residential,industrial, etc.) which will be the most expensive electrical poweravailable in that class. At step 34 the price for the commodity at asecond tier within the same class is determined. In the preferredembodiment, this will be interruptible power in the same class availablefor a substantially lower price than the power in the first tier. Theprice determinations made in steps 32 and 34 are accomplished using anyof a number of well known techniques. One source of information usefulin determining these prices is Federal Energy Regulatory Commission(FERC) Open-Access Same-time Information System (OASIS) providesinformation about available transmission capacity. At step 36 a price isdetermined for a financial instrument to cover the loss which would besuffered in the event of a foreseeable interruption in serviceassociated with the purchase of the second tier commodity. Typically thefinancial instrument is designed to cover the potential foreseeableinterruptions and not force majeure events. However, coverage for forcemajeure events could be included in an alternative embodiment of thepresent invention. At step 38 the generating utility or broker offersthe bundled commodity (interruptible power) and financial instrument(typically an insurance policy). The second tier commodity andindemnifying financial instrument are then sold to a customer at step40.

FIGS. 5 a and 5 b illustrate a system implementing the present inventionover a computer network. A customer using customer computer 42 wouldconnect to a commodity seller computer 46 via a computer network such asthe Internet 44. The commodity seller computer 46 has access tocommodity price data 48 and financial instrument price data 50. Theprice data may be stored on the commodity seller server 46 or anothercomputer. FIG. 5 b illustrates a bifurcated system in which there is afinancial instrument seller computer 52 in addition to the commodityseller computer 46. In the preferred embodiment the interface betweenthe customer computer 42 and the commodity seller computer 46 and thefinancial instrument seller computer 52 is implemented as a web pageaccessible to the customer via the World Wide Web. In an alternateembodiment the customer would contact a brokering computer which wouldin turn contact the commodity seller computer 46 and the financialinstrument seller computer 52.

Referring to FIG. 6, the method steps of the present invention areillustrated for an embodiment in which a customer is presented with thelower of two prices from two or more sources. At step 54 the price for afirst tier commodity from a first source is determined. At step 56 theprice for a second tier commodity from a first source is determined. Atstep 58 a price is determined for a financial instrument to cover theloss which would be suffered in the event of a foreseeable interruptionin service associated with the purchase of the second tier commodityfrom a first source. At step 60 the price for a first tier commodityfrom a second source is determined. At step 62 the price for a secondtier commodity from a second source is determined. At step 64 a price isdetermined for a financial instrument to cover the loss which would besuffered in the event of a foreseeable interruption in serviceassociated with the purchase of the second tier commodity from a secondsource. At step 66 the lowest combined price for a second tier commodityand bundled financial instrument is displayed to a customer and at step68 the transaction is processed.

FIG. 7 illustrates an implementation of the present inventionfacilitating an online auction for a commodity and bundled financialinstrument. A first bidder computer 70 and a second bidder computer 72are connected via a computer network such as the Internet 74 to atier-priced commodity transaction server 76. The tier-priced commoditytransaction server 76 presents the first bidder computer 70 and thesecond bidder computer 72 starting bids (prices personalized for eachparticipating bidder) for a given commodity at a specified tier and anassociated financial instrument. The prices may be different for eachbidder. The potential bids are accepted by the tier-priced commoditytransaction server 76 and the commodity and bundled financial instrumentis sold to the highest bidder.

More particularly, the starting price or bid for the first bundledproduct for the first bidder and the starting price or bid for thesecond bundled product for the second bidder are determined by thetransaction server 76 and provided to the first bidder computer 70 andthe second bidder computer 72, respectively, via the network 74. Thenetwork may be the Internet. The respective prices are displayed to thefirst and second bidders by the first and second bidder computers 70,72, respectively. The first and second bidders submit their bids to thecommodity transaction server 76, via their respective computers 70, 72,and the network 74. The commodity transaction server 76 sells the firstbundled product to the first bidder if the first bidder exceeds thefirst price by a greater amount than the second bidder exceeds thesecond price. The commodity transaction server 76 sells the secondbundled product to the second bidder if the second bidder exceeds thesecond price by a greater amount than the first bidder exceeds the firstprice.

FIG. 8 shows customer computer 78 connecting to commodity sellercomputers 82, 84, and 86 via a network, such as the Internet 80. Thecustomer computer 78 presents the commodity seller computers 82, 84, and86 with its commodity requirements and information necessary todetermine the cost of the requested commodity and the associatedfinancial instrument. In an alternate embodiment, the customer computer78 connects to a querying computer which collects information from thecustomer, retrieves the price combinations from the commodity sellercomputers 82, 84, and 86 and returns the best offer price to thecustomer. In yet another embodiment the querying computer contacts bothcommodity seller computers 82, 84, and 86 and financial instrumentselling computers and presents the customer with the best combinedprice.

Although the foregoing invention has been described in some detail forthe purpose of clarity of understanding, it will be apparent thatcertain changes and modifications may be practiced within the scope ofthe appended claims. Accordingly, the present embodiments are to beconsidered illustrative and not restrictive, and the invention is not tobe limited to the details given herein, but may be modified within thescope and equivalents of the appended claims.

I claim:
 1. A method of managing a sale of a commodity, the methodcomprising: providing, by a first processor, over a network, arespective price for a respective bundled product to respective secondprocessors of a plurality of bidders, each bundled product comprising acommodity and a financial instrument to indemnify against lossassociated with at least one risk related to purchase of the commodityby a respective bidder; displaying to a respective bidder the respectiveprice for the respective bidder, by a respective display coupled to eachrespective processor; receiving, by the first processor, via thenetwork, bids for respective bundled products from at least some of therespective second bidders; and determining, by the first processor,which of the bidders exceeds their respective price by a greater amount;and selling the respective bundled product to the respective bidder whoexceeds their respective price by the greatest amount.
 2. The method ofclaim 1, further comprising: selling, by the first processor, over thenetwork, the respective bundled product to a respective bidder whoexceeds their respective price by the greatest amount.
 3. The method ofclaim 1, comprising: determining the respective prices by the firstprocessor based, at least in part, on a price for the commodity for saleto each respective bidder with the at least one risk and a value for thefinancial instrument to indemnify each respective bidder.
 4. The methodof claim 3, wherein: the values of respective financial instruments arebased, at least in part, on one or more factors associated with eachrespective bidder.
 5. The method of claim 1, wherein the commodity ischosen from the group consisting of electricity, natural gas, water, andtelecommunications services.
 6. The method of claim 1, wherein: the atleast one risk includes a risk of interruptions in delivery to eachbidder; and respective insurance instruments indemnify against lossassociated with the interruptions.
 7. The method of claim 1, wherein thefinancial instrument is an insurance instrument.
 8. A method formanaging the sale of a tier-priced commodity, comprising: displaying toa first bidder a first price for a first bundled product comprising acommodity and a first insurance instrument to indemnify the first bidderagainst loss associated with at least one risk related to the purchaseof the commodity, on a first display device coupled to a firstprocessor; displaying to a second bidder a second price for a secondbundled commodity comprising the commodity and a second insuranceinstrument designed to indemnify the second bidder against lossassociated with at least one risk related to the purchase of thecommodity, on a second display device different than the first displaydevice, coupled to a second processor different from the firstprocessor; receiving bids by a third processor different than the firstand second processors, for the first bundled product from the firstbidder and for the second bundled product from the second bidder, fromthe first and second processors, respectively; determining, by the thirdprocessor, which of the first and second bidders exceeds theirrespective first and second prices by a greater amount; and selling thefirst bundled product to the first bidder if the first bidder exceedsthe first price by a greater amount than the second bidder exceeds thesecond price or selling the second bundled product to the second bidderif the second bidder exceeds the second price by a greater amount thanthe first bidder exceeds the first price.
 9. The method of claim 8,wherein the first price and the second price are different.
 10. Themethod of claim 8, wherein the commodity is chosen from the groupconsisting of electricity, natural gas, water, and telecommunicationsbandwidth.
 11. The method of claim 10, wherein: the at least one riskincludes a risk of interruptions in delivery; and the first and secondinsurance instruments indemnify against loss associated withinterruptions in delivery of the commodity to first and second bidders,respectively.
 12. The method of claim 11, wherein the price of the firstand second insurance instruments are based, at least in part, on one ormore factors associated with the first and second bidders, respectively.13. The method of claim 8, wherein: the at least one risk includes arisk of interruptions in delivery; and the first and second insuranceinstruments indemnify against loss associated with interruptions indelivery of the commodity to the first and second bidders, respectively.14. The method of claim 8, wherein the price of the first and secondinsurance instruments are based upon one or more factors associated withthe first and second bidders, respectively.
 15. The method of claim 8,comprising receiving the bids from the first and second processors, viaat least one network.
 16. The method of claim 15, wherein the at leastone network comprises the Internet.
 17. A method of managing a sale of acommodity, comprising: receiving by a first computer associated with afirst party a price for a bundled product comprising a commodity and afirst financial instrument to indemnify against loss associated with atleast one risk related to purchase of the commodity by the first party,via a first network; receiving by a second computer associated with asecond party a second price for a bundled product comprising thecommodity and a second financial instrument to indemnify against lossassociated with at least one risk related purchase of the commodity bythe second party, via a second network; sending a first bid from thefirst computer via the network; and sending a second bid from the secondcomputer via the network; wherein: if the first party exceeds the firstprice by more than the second bid exceeds the second price, the firstparty receives the bundled product for the first price; and if thesecond party exceeds the second price by more than the first partyexceeds the first price, the second party receives the bundled productfor the second price.
 18. The method of claim 17, wherein the first andsecond networks comprise the Internet.
 19. The method of claim 18,wherein: the first and second prices are received from a third computer,via the Internet; and the first and second bids are sent to the thirdcomputer, via the Internet.